Some Features of Pledge in Bankruptcy Proceedings

The paper analyses the imposition of value added tax on the operations connected with the use of household assets and foreclosure sale guaranteed by a pledge in bankruptcy proceedings, as well as the possibility of applying art. 334 of Civil Code to the matters arising due to the use of pledged property in bankrupcy procedures.The main goal of the study is to clarify theoretical and practical issues connected to the given institute. The structure of the paper consists of two chapters. The first one focuses on the theoretical and practical aspects and the problems of pledge elasticity in bankruptcy proceedings. The second one discusses practical issues and scholarly works which concern the recovery of value added tax sums gained by using pledge during bankruptcy proceedings. Elasticity is suggested to be the universal attribute of pledge applied in insolvency proceedings regardless of claims or the priority of unsecured creditors. The second chapter pays particular attention to the practices of added value tax recovery in lawsuits related to bankrupcy, and reviews the positions of reputable scholars in the realm of business law and revenue law. The author comes to the conclusion that instable models of legislative regulation need adjustment, since the research reveals the inconsistency in the preferential discharge of claims made by authorized bodies outside the quota allocated by article 138 of bankruptcy act